Financial Literacy
WRITTEN ASSIGNMENT 1 Part 2
Submission Instructions
1. You must submit your report in
Excel or in
formatted tables in Word.
2. This is an individual submission and covers
topics 4 and 5.
Question 1 of 1 (40 marks)
Donburn Health Centre offers Sports Massage and Personal Training services. From the information provided you are required to prepare the following budgets for the
month
of June 2020:
a) a revenue budget (10 marks)
b) an operating expense budget (15 marks)
c) a cash budget (15 marks)
Information provided by Donburn:
1. The total number of clients in the month of June 2019 was 1000. This is expected to increase by 15% for June 2020.
2. 60% of clients are Sports Massage and 40% are Personal Training.
Type of client
|
Short visit
|
Long visit
|
Sports Massage
|
80%
|
20%
|
Personal Training
|
60%
|
40%
|
Fees for all services: Short visit $23
Long visit $38
3. Sports Massage supplies are estimated to cost $2.50 per client visit and are purchased on the following credit terms:
▪ 30% paid in the month of purchase
▪ The balance is paid one month following the purchase.
▪ All supplies purchased are used in the same month.
4. Sports Massage supplies purchased in the month of May 2020 totalled $2 550.
5. Minor Equipment purchases are expected to be 2% of total fee revenue from Sports Massage and Personal Training.
6. Marketing Promotion is budgeted to be 1% of total fees/revenue.
7. Advertising is set at $600 per quarter and is paid for in June.
8. Salaries are to be $12,000 per month. Sports Massage and Personal Training are
75% of the salary total and the remaining 25% is budgeted for office staff salaries.
9. Standard cleaning is $600 per month plus there is additional cleaning which is estimated to be 0.5% of total fees/revenue per month.
10. Utilities (gas and electricity) are expected to be $1 000 per quarter and are paid for in June.
11. Interest on the loan is estimated to be $1 000 per month. The monthly loan repayment including interest is $ 1 700.
12. A portion of the Health Centre is rented out to a podiatrist which generates $450 of revenue each month.
13. New Personal Training equipment of $4 000 is expected to be purchased and paid for in cash by the end of June.
14. All other revenue and expense items are paid or received in the month of June.
15. Drawings by the owner are $4 000 per month.
16. Bank balance as at 1 June 2020 is expected to be $6 179.
Total 40 marks